Hedonic Prices for a Nondurable Good: The Case of Breakfast Cereals.

Numerous studies have estimated hedonic price functions for durable goods. In this paper, the authors apply the methodology to breakfast cereals, a nondurable good. They employ maximum likelihood to estimate the hedonic price functions using data from three large supermarkets. The price function depends on characteristics that provide taste, nutrition, and convenience to consumers, and the estimates yield insights into pricing policies, consumer preferences, and consumer use of information. Copyright 1991 by MIT Press.